PAY is now soaring faster than inflation, with record numbers of people in work, figures showed yesterday.

In a pre-Christmas boost, the Office for National Statistics reported that 30.8 million people are now working, the highest level since records began in 1971. The number of people in a job has risen by 588,000 in a year.

The increase has been fuelled by a private sector jobs boom – with 10 positions being created for every role lost in government services. Public sector employment has fallen by 49,000 in the past year to 5.3 million.

At the same time, the number of people in the private sector has risen by 637,000. The number of state employees has fallen to the lowest level since records began in 1999.

In a further welcome tonic for the Government, the number of young people claiming the dole has plummeted to the lowest level since the 1970s.

Overall, Britain’s unemployment rate is now six per cent, down by 0.2 per cent on the previous quarter and by 1.4 per cent over the past year.

Chancellor George Osborne hailed the figures, saying: “This is a major moment in the British economic recovery.

It shows we have got to go on working through our long-term economic plan at a time when there are plenty of risks out there in the world and plenty of people here in Britain who want to borrow and spend more and put all that at risk.”

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Iain Duncan Smith praised the Government's economic policy

Behind the figures are countless stories of individual hard work and determination

Iain Duncan Smith

The number of people claiming jobseeker’s allowance was down by 26,900 in November to 900,100. This was the 25th consecutive monthly fall.

There are now 208,100 people aged 18 to 24 claiming the allowance, down more than a third in the past year. Regular pay has risen by 1.6 per cent in the year to October.

It comes as figures this week showed inflation had fallen to just one per cent, its lowest level for 12 years.

Average pay is now £483 a week before tax and other deductions. Wages have risen by 55.3 per cent compared with the year 2000.

Work and Pensions Secretary Iain Duncan Smith said: “These remarkable figures show that our long-term economic plan to create a better, more prosperous future for Britain is working.

“Behind the figures are countless stories of individual hard work and determination, with more people than ever before feeling financially secure.”

Employment Minister Esther McVey highlighted the fact that 95 per cent of new jobs in the past year were full-time positions.

She said that Britain was creating more posts than its main economic rivals, including the United States and Germany. Business leaders also welcomed the statistics.

Neil Carberry, Confederation of British Industry director for employment and skills, said: “As we come to the end of the year, it’s good news that unemployment continues to fall, as jobs are being created. It’s good to see even more people working full time.

“We are starting to see the first signs of real pay growth picking up, which will have given households an encouraging boost in the run-up to Christmas.”

David Kern, chief economist at the British Chambers of Commerce, said: “The UK labour market remains strong, resilient and flexible.”